Category: Legislation

Dane County Judge Orders Temporary Injunction of Extraordinary Session Laws

Posted on by Hamilton

On March 21, Dane County Circuit Court Judge Richard Niess issued an order granting a temporary injunction prohibiting the enforcement of laws passed in the 2018 Extraordinary Session. Provisions blocked by the order include limits on the attorney general’s authority to withdraw from or settle certain cases, the legislature’s ability to intervene in certain lawsuits, agency guidance documents transparency requirements, increased legislative oversight of agency rulemaking, and 82 agency appointments.

The plaintiffs in the case, League of Women Voters v. Knudson, argue that the extraordinary session was not convened in accordance with the Wisconsin Constitution, which authorizes the legislature to meet only as provided by law or when convened by the governor (Wis. Const. Art. IV, § 11).

The Legislature intervened as a defendant and argues that convening an extraordinary session does not violate the Wisconsin Constitution because the rules for the 2017-18 session prescribed in 2017 Senate Joint Resolution 1 specifically state that any days not reserved for scheduled floorperiods are available for the legislature to convene an extraordinary session. The Legislature met as provided by law under the Constitution and Wis. Stat. § 13.02(3).

In his order, Judge Niess agreed with the plaintiffs’ argument that non-prescheduled floorperiods in the joint resolutions are not “allowed by law” according to the Constitution because resolutions are not law. The judge stated that temporary injunction is necessary because the plaintiffs are likely to succeed with this argument, enforcement of the extraordinary session legislation would result in “substantial changes to Wisconsin government,” and failure to enjoin the enforcement of unconstitutional laws would be an irreparable harm to the state.

The judge also denied the Legislature’s motion to dismiss the case and its alternative motion to stay the temporary injunction pending appeal.

Immediately following the enjoinment of the extraordinary session laws, Gov. Tony Evers directed Attorney General Josh Kaul to withdraw Wisconsin from the multistate lawsuit seeking to declare the Affordable Care Act unconstitutional. Act 369, now temporarily unenforceable under the court order, had required approval of the legislature before the attorney general could withdraw from the lawsuit. Kaul subsequently filed a motion to withdraw Wisconsin from Texas v. United States.

Evers also rescinded the 82 appointments approved by the Senate in the extraordinary session.

 On March 22, the Legislature filed an emergency motion in the Court of Appeals District III to stay the injunction. The Legislature argues they are exceedingly likely to prevail on the merits on appeal, and a stay will prevent irreparable harm caused by blocking the extraordinary session laws. The appeals court has yet to issue a decision on the stay.

Budget Bill Seeks to Reinsert Anti-Business Qui Tam Law

Posted on by Hamilton

In his proposed 2019-21 state budget, Gov. Tony Evers seeks to reinstate a law repealed in 2015, known as “qui tam,” which allows private individuals to bring lawsuits on the government’s behalf. Evers’s proposal goes even further than Wisconsin’s previous qui tam law by applying the law not only to Medicaid fraud and but to all state agencies. The Wisconsin Civil Justice Council helped repeal the law in 2015 and will work hard to ensure that it is not enacted back into law.

 

Background of Qui Tam in Wisconsin

Qui tam is a Latin term describing a legal action to collect a penalty through supplied information from the public. Under this legal doctrine, a private party called a “relator” may bring a whistleblower lawsuit against a party on the government’s behalf. The relator must first present the information to the government, which can decide to either pursue the case, or deny involvement and allow the plaintiff to bring the case on behalf of the state using a private plaintiff attorney.

In 2007, the Wisconsin Legislature enacted the previous qui tam law, which applied only to Medicaid fraud cases. In 2015, the law was repealed by the Legislature during the budget bill process.

 

Qui Tam Law Reintroduced by Gov. Evers

On February 28, Gov. Tony Evers introduced the 2019-21 budget bill which not only reintroduces the previous qui tam law for Medicaid fraud, but also would expand to the law to all state agencies. This means that if any private party contracting with the state is alleged to have committed a “false claim” with the state of Wisconsin, a relator can bring a claim on behalf of the state against the business.

The problem with the qui tam law is that it provides incentives for private parties to sue. Under the proposed budget bill language, the relator can receive up to 30 percent of the total alleged damages to the state, as well as the ability to recoup his or her attorney’s fees and costs.

Moreover, the business providing the service to the state can be liable for up to three times the damages the state sustained, “or could have sustained,” whichever is higher.

 

State Qui Tam Laws Profit Plaintiff Attorneys and Do Little to Prevent Fraud

Not surprisingly, the main proponents of qui tam laws are plaintiff attorneys who profit off of suing businesses and medical providers on behalf of the state.

The U.S. Chamber Institute for Legal Reform in 2018 published a paper, “The Great Myths of State False Claims Acts,” which explains that there is little evidence that these statutes accomplish the ostensible goal of detecting and recovering damages for Medicaid fraud. Instead, in many instances the states with qui tam statutes may actually recover less from the average Medicaid fraud settlement than those states without, due to the state’s obligation to pay out a share of the settlement to the private party.

At the federal level, the U.S. Department of Justice (U.S. DOJ) is seeking to curb meritless qui tam law suits encouraged by the Federal False Claims Act. Noting record increases in qui tam actions, in 2018 the U.S. DOJ issued a memo providing a general framework for its attorneys on when to dismiss qui tam actions in which the government chooses not to intervene. With the federal trend away from supporting qui tam actions, Wisconsin should not resurrect these ineffective and often meritless actions at the state level.

It’s also important to note that Wisconsin already has a law – Wis. Stat. § 49.49 – that grants the Attorney General the authority to prosecute Medicaid fraud and recover damages on behalf of the state. All damages recovered under this law go to the State of Wisconsin and need not be paid out to a private party or plaintiff attorneys.

 

Conclusion

The Wisconsin Civil Justice Council was instrumental in getting the previous qui tam law repealed in 2015, and will work hard to make sure the law is not enacted back into law.

 

Gov. Evers Budget Would Restore Qui Tam, Reverse Extraordinary Session

Posted on by Hamilton

In his 2019-21 state budget address, Gov. Tony Evers proposed several reforms related to Wisconsin civil procedure. Most notably, the governor is seeking to restore private individuals’ ability to bring qui tam claims by reviving the False Claims Act. WCJC supported the repeal of the False Claims Act in the 2015-16 state budget. Read about the budget proposal’s qui tam provisions and other notable budget provisions below.

 

Qui tam

 Qui tam claims are claims initiated by private individuals on their own behalf and on behalf of the state. Prior to the 2015-16 budget repeal, Wisconsin’s False Claims Act allowed private individuals to bring qui tam claims against persons who make false claims for Medical Assistance. Evers’s proposal goes even further than Wisconsin’s previous qui tam law by applying the law not only to Medicaid fraud and but to all state agencies. The Wisconsin Civil Justice Council helped repeal the law in 2015 and will work hard to ensure that it is not enacted back into law. Read more about the budget’s qui tam provision.

 

Extraordinary session

Evers is proposing the repeal of parts of the 2018 extraordinary session legislation. Evers suggests a full repeal of Act 370 which gives the legislature oversight of agency waiver requests, allows Joint Finance Committee oversight of Medicaid program changes, and codifies Medicaid work requirements and substance abuse screening for FoodShare.

Evers also proposes repealing provisions of Act 369 including:

  • The requirement that the legislature approve settlements by the attorney general.
  • The requirement that the attorney general deposit all settlement funds into the general fund.
  • The ability of the legislature to intervene in lawsuits involving the state.
  • The ability of the legislature to obtain outside legal counsel.
  • The definition and public transparency requirements for agency guidance documents.
  • The requirement that agencies cite statutes supporting any interpretation of law they publicly provide.

 

Settlement funds

In addition to eliminating the current requirement that all settlement funds go to the general fund, Evers proposes new appropriations for settlement funds in DOJ. These new appropriations include:

  • An appropriation to administer and remit payments received by DOJ that are owed to relators (i.e. in qui tam actions).
  • An appropriation to administer settlement funds where the terms of the settlement specify how the funds should be used.
  • An appropriation to administer settlement funds where the terms of the settlement do not specify how the funds should be used. This appropriation may be used in DOJ at the attorney general’s discretion.
  • A requirement that DOJ submit semiannual reports to the Joint Finance Committee on how settlement funds are spent.

 

Judicial Council

Evers’s budget proposal does not restore funding or position authority to the Judicial Council. Former Gov. Scott Walker defunded the Judicial Council in the 2017-19 state budget after the Supreme Court sent an orderto DOA that it will no longer transfer funds to DOA in support of the Judicial Council. While the Judicial Council lacks funding, the statute (Wis. Stat. § 20.670) creating the Judicial Council remains in place.

The Judicial Council’s proposed budget details performance measures and results from 2017 continuing into 2021. The Judicial Council’s goals for 2019, 2020, and 2021 include:

  • Drafting and filing a Supreme Court petition to update rules regarding duty to preserve evidence in civil case.
  • Reviewing ways to incorporate Federal Rules of Evidence into Wisconsin’s rules.
  • Review modifications to the Rules of Civil Procedure created by 2017 Act 235 to update the act with Federal Rules of Civil Procedure. WCJC supported Act 235 in the 2017-18 session.

DPW Files Extraordinary Session Challenge

Posted on by Hamilton

The Democratic Party of Wisconsin (DPW) has filed a complaint seeking to declare the 2018 extraordinary session legislation in violation of the U.S. Constitution. The complaint, one of several challenges to the extraordinary session, alleges that the legislation violates the plaintiffs’ First and Fourteenth amendment rights, as well as the Guarantee Clause.

The U.S. Constitution Art. 4 § 4 guarantees states a republican form of government. DPW’s complaint alleges that the Republican legislature violated the Guarantee Clause by removing powers from the incoming Democratic administration to the legislature.

DPW also claims that the extraordinary session violated the plaintiffs’ First Amendment rights to free association and free speech because the state legislature retaliated against Democratic candidates based on their political viewpoints by limiting their ability to enact their policy preferences via the newly elected Democratic Gov. Tony Evers and Attorney General Josh Kaul.

Finally, DPW argues the legislation violates the Fourteenth Amendment’s Equal Protection Clause because it dilutes the power of Democratic votes.

The complaint is the first federal challenge to the extraordinary session legislation. Other challenges in state courts argue that the extraordinary session was not convened in accordance with the Wisconsin Constitution (League of Women Voters v. Knudson) and that the legislation violates the state Constitution’s separation of powers principles (Service Employees International Union v. Vos).

Evers Supports Unions in Act 369 Challenge

Posted on by Hamilton

Gov. Tony Evers has filed a motion asking the Dane County Circuit Court to grant a temporary injunction on several provisions of the 2018 extraordinary session legislation. The plaintiffs in this challenge include a coalition of labor unions and state Sen. Janet Bewley (D-Mason). Evers, who is a defendant in the lawsuit, argues that the plaintiffs are likely to succeed in their claims that provisions of 2017 Act 369 and 2017 Act 370 are unconstitutional. Note that Evers is also seeking to repeal the legislation in his 2019-21 budget proposal.

Evers’s brief claims that those provisions violate constitutional separation of powers principles by interfering with the governor’s authority to interpret the law and to prosecute cases on behalf of the state via the attorney general. The brief further argues the increased legislative oversight of agency decisions creates an unconstitutional “legislative veto” and violates constitutional bicameralism and quorum requirements.

Specifically, Evers’s brief supports the plaintiffs’ challenge of Act 370 provisions that require legislature approval of agency requests to the federal government and Act 369 provisions that

  • Create a definition and public transparency requirements for agency guidance documents.
  • Require the Department of Administration to send notice to the Joint Committee on Legislative Organization (JCLO) of any proposed changes to security at the capitol. JCLO then holds a 14-day passive review period on the proposed changes.
  • Require a Joint Finance Committee (JFC) 14-day passive review period for any new enterprise zone proposed by the Wisconsin Economic Development Corporation.
  • Allow the legislature to intervene in an action challenging the constitutionality or validity of a statute.
  • Shift the authority to approve the attorney general’s compromising or discontinuing an action from the governor to JFC.
  • Require JCLO authority for the attorney general to submit to JFC a settlement plan that acknowledges the unconstitutionality of a statute.
  • Give JCLO the authority to acquire office space for legislative offices or legislative service agencies.
  • Allow the Joint Committee for Review of Administrative Rules to suspend a rule multiple times.

In addition to what the plaintiffs are challenging, Evers suggests the court place an injunction on Act 369 sections that

  • Require agencies to cite statutes supporting any interpretation of law they publicly provide.
  • Allow JCLO to intervene in cases involving the state and in other matters.

Note that Evers does not challenge the Act 369 provision codifying the recent Supreme Court decision in Tetra Tech v. DOR that eliminated the practice of courts’ deference to agency interpretations of law.

This case is one of several challenges to the extraordinary session legislation enacted in December 2018. Another lawsuit from the League of Women Voters, Disability Rights of Wisconsin, and Black Leaders for Organizing Communities argues that the extraordinary session was not convened in accordance with the Wisconsin Constitution, which authorizes the legislature to meet only as provided by law or when convened by the governor (Wis. Const. Art. IV, § 11). The Democratic Party of Wisconsin recently filed another challenge alleging that the legislation violates the U.S. Constitution.

 

Financial Exploitation Cause of Action Legislation Introduced

Posted on by Hamilton

Sen. Bob Wirch (D-Racine) has introduced legislation (SB 41) that would create a new civil cause of action for financial exploitation of a vulnerable person. The bill awards prevailing plaintiffs treble damages (economic and noneconomic), attorney fees, and fees for services of any guardian ad litem incurred because of the litigation.

The bill allows the injured vulnerable person, the person’s guardian, or a representative of the person’s estate to bring an action for financial exploitation. SB 41 defines “vulnerable person” as an elderly, financially incapable, or incapacitated person, or a person with a disability who is susceptible to coercion because of his or her impairment.

According to Wirch’s cosponsorship memo, the bill is modeled after an Oregon law. Only three other states (Arizona, California, and Florida) have adopted similar laws.

SB 41 has been referred to the Senate Judiciary Committee. In addition to Wirch, the bill has 12 Democratic cosponsors – three senators and nine assembly representatives.

2019-20 Judiciary & Courts Committees

Posted on by Hamilton

Senate and Assembly leadership have finalized committee assignments for the 2019-20 session, including those committees that will likely be tasked with legal reform bills. Lists of committee members are below.

 

Senate Committee on Judiciary & Public Safety

  • Van Wanggaard (R-Racine), Chair
  • Andre Jacque (R-DePere), Vice-Chair
  • Alberta Darling (R-River Hills)
  • Fred Risser (D-Madison)
  • Lena Taylor (D-Milwaukee)

 

Senate Committee on Insurance, Financial Services, Government Oversight & Courts

  • Dave Craig (R-Big Bend), Chair
  • Duey Stroebel (R-Saukville), Vice-Chair
  • Dan Feyen (R-Fond du Lac)
  • Lena Taylor (D-Milwaukee)
  • Fred Risser (D-Madison)

 

Assembly Committee on Judiciary

  • Jim Ott (R-Mequon), Chair
  • Cody Horlacher (R-Mukwonago), Vice-Chair
  • Jeremy Thiesfeldt (R-Fond du Lac)
  • Rob Brooks (R-Saukville)
  • Ron Tusler (R-Harrison)
  • Samantha Kerkman (R-Salem)
  • Jimmy Anderson (D-Fitchburg)
  • Gary Hebl (D-Sun Prairie)
  • Marisabel Cabrera (D-Milwaukee)

Gov. Walker Signs Extraordinary Session Legislation Limiting AG Authority

Posted on by Hamilton

Last week, Gov. Scott Walker signed into law the extraordinary session legislation passed by the legislature earlier this month. The legislation, 2017 Act 369, provides a more stable, predictable regulatory and litigation environment for Wisconsin businesses by limiting the authority of activist attorneys general.

The extraordinary session legislation gives the legislature more oversight of settlements pursued by Wisconsin’s attorney general. The bill requires Joint Committee on Finance (JFC) approval of any compromise or discontinuance of an action pursued by the Department of Justice. (Current law requires approval from the governor.) Settlement plans my not concede the invalidity of a statue unless the Joint Committee on Legislative Organization approves. Actions for injunctive relief or proposed consent decrees are also subject to a 14-day passive review period by JFC. The legislation also removes the attorney general’s authority to expend settlement funds and instead automatically deposits any settlement funds directly into the general fund.

Under the Act, the legislature also may intervene in cases alleging that a state statute is unconstitutional, been preempted by federal law, or the validity of the statute is otherwise challenged.

Other provisions of Act 369 include the statutory removal of agency deference, incorporating the 2018 Wisconsin Supreme Court decision Tetra Tech v. Department of Revenue, and transparency and legislative oversight requirements for agency rulemaking.

Legislature Names Judiciary & Courts Committee Chairpersons

Posted on by Hamilton

Senate Majority Leader Scott Fitzgerald (R-Juneau) and Assembly Speaker Robin Vos (R-Rochester) have announced 2019-20 committee leaders for their respective chambers, including those committees that will likely be tasked with legal reform bills.

In the Senate, Sen. Van Wanggaard (R-Racine) was renamed chairman of the Committee on Judiciary & Public Safety. In addition, Sen. Dave Craig (R-Big Bend) will chair a Committee on Insurance, Financial Services, Government Oversight & Courts. (List of all Senate committee chairs.)

On the Assembly side, Rep. Jim Ott (R-Mequon) will again chair the Committee on Judiciary. (List of all Assembly committee chairs.)

Announcements on the makeup of committees are expected closer to the start of the 2019-20 legislative session on Jan. 7.

In Extraordinary Session, Wisconsin Legislature Approves Additional Oversight of AG Settlements

Posted on by Hamilton

In an extraordinary session on Dec. 4, the Wisconsin Senate and Assembly passed legislation giving the legislature additional oversight of settlements pursued by the state attorney general. The legislation provides a more stable, predictable regulatory and litigation environment for Wisconsin businesses by limiting the authority of activist attorneys general.

The extraordinary session legislation requires Joint Committee on Finance (JFC) approval of any compromise or discontinuance of an action pursued by the Department of Justice. (Current law requires approval from the governor.) Settlement plans my not concede the invalidity of a statue unless the Joint Committee on Legislative Organization approves. Actions for injunctive relief or proposed consent decrees are also subject to a 14-day passive review period by JFC. The legislation also removes the attorney general’s authority to expend settlement funds and instead automatically deposits any settlement funds directly into the general fund.

The legislature also may intervene in cases alleging that a state statute is unconstitutional, been preempted by federal law, or the validity of the statute is otherwise challenged.

It is anticipated that Gov. Scott Walker will sign the legislation into law later this month.

Read about other legislation passed in the extraordinary session.